AWWA JAW39525

Municipal water rates are expected to satisfy three objectives: efficiency, revenue neutrality to the utility, and distributional equity. Unfortunately, adjusting rates to efficiently achieve use and conservation targets would ordinarily generate excessive revenues. Rather than mold one tool to the service of three masters, this article suggests combining three separate tools. The first sets the water rate to cover the utility's costs. The second assigns customers allotments to water use. The third either charges a fee for use that exceeds the customer's allotment or hands out rebates for consumption below that allotment. The fees pay for the rebates--thus the term "feebate." The outcome is: revenues to the utility just sufficient to cover costs; efficient water consumption by municipal water customers without conservation mandates; and revenue effects that can be spread fairly across various categories of customers. Includes 14 references.

Product Details

Edition:

Vol. 88 - No. 1

Published:

01/01/1996

Number of Pages:

9

File Size:

1 file , 1.2 MB